Avanti Communications Share Discussion Threads

[seball] 03/6/2016 10:22

I agree that Avanti are going to hit target. The shares were over 200p when that as the case. I can only see Avanti rising from these levels. This has overshot to the downside and is due a bounce. Good luck

[weatherman] 03/6/2016 09:42

The breakeven point from the Edison note seems to be $135m - the point when cash outflow balances cash inflow. The latest note suggests in the fy to June 2017 they will do $125m turnover (an increase on the last Edison note) - so a short fall of only $10m. Then in fy 2018 they are forecast to exceed cash outflow.

The last qu3 was $19.5m, if annualised is near $80m. For the full year FY2016 they are forecast to have turnover of ~$90m, so they are on their way to meeting targets. Much of the rapid cash outflow is capital spending on Hy3 and 4, but this will fall to low levels. I am increasingly confident they will meet targets, but at what price will the stock settle at to average down?

[weatherman] 02/6/2016 22:22

Because in takeovers the institutions own stocks in both the buying company and the one being bought.

[value king] 02/6/2016 19:36

My buy in the past week doesn't look too well timed.

[bwakem] 02/6/2016 18:17

I suspect to get around the going concern issue they will cite the consented credit facility of ~ $70m. But of course this money doesn't exist, it's just the bondholders have given Avanti permission to borrow more money from someone else so long as it is subordinate to the bonds. The bonds are yielding 20% so the interest rate on this $70m would have to be at least 25% since it is higher risk and unsecured.

[weatherman] 02/6/2016 18:02

Institutions are not stupid and will force a takeover and ousting of Williams if they can salvage some value for their own funds. I doubt it will go to liquidators. ISAT and other SAT operators needs Ka band to help grow - a takeover may offer a cheap way in.

[seball] 02/6/2016 18:02

Trading update was on the 16th May which is half way through Q4. They would not have reiterated guidance for Q4 if they were not confident. I'm very happy to buy more at these levels. I'm expecting a rise upto and on release of results. Good luck all

[weatherman] 02/6/2016 17:39

If AVN misses its targets and it runs out of cash I can see the institutions seeking an arranged takeover with ISAT or another. AVNs assets exceed by some margin the market cap plus debt.

[chriscallen] 02/6/2016 17:15

On past performance the pre close trading update should be in 1 - 7 July (I used to think it meant before the year end).

The next really significant date is when the audited year end figures are released (a) because they give the audited income and (b) because if they look like running out of cash before 30/06/2017 the accounts will be qualified as a going concern. The auditors will be aware that if the company folds in the following 12 mths the litigation will be horrendous and expensive so they really take this seriously. Management can't lean on them!!!!

[hpcg] 02/6/2016 13:05

Pretty embarrassing for the pumpers here. Wait until the market cap gets down to 50 million and the bag holders control the marginal pricing. You'll get much better bang for the effort you are putting in. At the moment you are up against the institutions selling down as fast as their dealers can work the stock. Hence why any small rise is slammed back down.

[roofer2] 02/6/2016 12:10

When is the next trading update ?

[seball] 02/6/2016 12:03

Trading update was on the 16th May which is half way through Q4. They would not have reiterated guidance for Q4 if they were not confident. 4 bagger in a year imo.

[saracen67] 02/6/2016 11:43

That would be a catalyst!!!
But this came down from £2.50 in six months on concerns over revenue trajectory. This is not a trusting market environment BUT
If they hit the guidance they recently reiterated it should go straight back. The $25m EE contract might have helped were it not for EUTELSATs 30% profit warning crash on the same week which trashed the sector. So this is a 30 day four bagger if am right. So it is massively biased to the upside at this level

[seball] 02/6/2016 09:59

Also Avanti have a different mix of customers and superior technology. Alot of the companies some mentioned above will be looking at a takeover of Avanti imo.

[saracen67] 02/6/2016 09:38

Only institutions could buy in that scale
The whole sat sector is down with the top 4 global operators (ISAT, INTELSAT EUT & SES down 45% on average so some big macro funds have sold out of the sector and that might include GIC. Hedge fund will try to spot value and clearly some see it in AVN

[hpcg] 02/6/2016 08:31

Chris, of the 1,796,654 shares dealt yesterday there were 1,796,654 sells and 1,796,654 buys. That is how a stock market works. We can be pretty sure that GIC Private Limited is selling as they went below 5% and then 4% in pretty short order.

What usually happens in these cases is that institutions sell down until the market cap gets to about 50 million quid. At that point all the shares belong to the bag holders and the share price can gyrate as price discovery gets based upon the tone of a CEO video rather than published financial data. Depending on the balance sheet the company goes belly up or can last for years. One of the things which makes shorting straight forward now is that so many companies are levered up that an abrupt ending is more predictable.

AVN could indeed stabilise and then recover but it would have to start performing in a way which it has failed to do since H1 came into service.

[elrico] 02/6/2016 01:24

Now I ain't suggesting I'm correct here, but I do seem to recall a certain welsh dude making a token buy when he was a significant net seller...is history repeating?

[chriscallen] 01/6/2016 20:05

I don't think its insiders because the 10 largest shareholders plus the directors and employees own 76.9% of the issued shares, leaving 34,048,559 as the remaining pool of shares which form the normal daily dealing "pot". Whilst to the likes of most of us a few of today's sales represent a significant amount in the overall scheme of things the whole days turnover is still peanuts and it wasn't all sales.

In just 30 mins after hours yesterday 1,796,654 shares were according to the HL website bought. There were no sales. That's 5.2% of the pot and if it can happen once it can happen again.

I don't think any of the sellers today had that sort of muscle. But on reflection I think the buyers will be holding long term so the pot is now that much smaller. Short sellers may therefore find it much harder to borrow shares and price movements could easily become much more volatile. I suspect we're moving towards the point when cards have to be put face up on the table. On 31 May the CEO made a short video and seemed pretty confident. It was clearly scripted so I suspect the lawyers will have crawled all over it so that no hostages were given. The problem both I and the shorters have is that the AVN model is different to its competitors. If Edison is right AVN becomes cash positive at 40% utilisation i.e. it pays all of its expenses including interest. That's a 12 mth target that does look possible and if they hit it the war for the shorters is over.

[ramas] 01/6/2016 19:20

Difficult to short I'd say insiders selling .... Over leveraged tin in the sky

[bulltradept] 01/6/2016 13:01

From where seball 50p?

[seball] 01/6/2016 09:14

Expecting this to bounce. This is heavily oversold on a technical and fundamental view. Avanti contract wins starting to gain traction. Good luck all

[spectoacc] 01/6/2016 08:11

Well spotted @Saracen.